Healthcare Reform: Operational Impact and the Lean Design Team, Part 1
Photos courtesy of: CollinsWoerman
Providers that continue to sit on the fence about adopting Lean processes in their operations can look to the bottom line for evidence of need. This article, the first of a two-part series, highlights such problems as wasteful practices, excess inventory, unused capacity and other factors that Lean operations can help solve. It describes how Lean process can be “designed-in” to the built environment. The stage is set As the Affordable Care Act celebrates its one-year anniversary, it is quite evident that with or without the act, healthcare delivery is destined to change. Predictions indicate that without significant change, continued increased healthcare spending may drive our economy to insolvency.
The majority of healthcare delivery organizations agree that “doing nothing” is not an option and together they can transform healthcare, and avoid an inevitable catastrophe. Becoming an “Accountable Care Organization” (ACO) is one way to compel them to reinvent their processes. In this way, organizations can drive out waste, improve care, and decrease costs—even with increased demand from the boomer generation and the possibility of more uninsured people.
But how can design of the built environment help to remove waste and reduce the cost of care? Can Lean design drive operational change? To a large degree the answer is “yes,” but not without significant transformation of every healthcare delivery organization. The healthcare delivery infrastructure must change. Most improvement strategists caution that waste will get in the way of any improvement efforts, so the primary tactic is: Remove the waste first.
In partnering with Evergreen, CollinsWoerman developed a Lean design approach to encourage patient flow, achieving greater efficiency and dedicating more provider time to each patient.
Operational impact—strategies for immediately reducing healthcare costs
The elimination of waste in current practice will go a long way to cut healthcare spending. A number of healthcare research organizations have identified specific areas where waste is most prevalent. Many of these wastes are being targeted by healthcare reform:
- Administrative inefficiencies have long been recognized as a huge source of waste. Every step, from documenting patient records to billing multiple insurance providers, is laden with the waste of variation. Administrative costs consume nearly one-third of each dollar spent in healthcare. Implementing standard work will also lead to reduced space demand.
- Clinical inefficiencies are a significant source of waste in both operational and facilities terms. Lack of efficient scheduling practices and poor resource coordination have led to inappropriate equipment utilization (for example, expensive imaging and surgical robotics) and low facilities utilization (such as idle OR’s and exam rooms), resulting in operational inefficiencies. Other sources of waste include over-utilization of patient testing, intensive care services, and hospitalizations.
- Avoidable errors can lead to increased utilization of hospital services, such as unnecessary admissions, extended stays, and readmissions. Incomplete drug reconciliation and adverse drug effects are other sources of errors.
- Care coordination is vital to cost containment. The lack of care coordination results in more ED visits, hospitalizations, and medical errors. Reasons for this condition range from missing or incomplete medical records, and poorly documented hand-offs, to inappropriate tests, treatments, or drugs administered.
- Unnecessary use of services contributes to nearly half the waste identified in healthcare. These include “defensive” diagnostics, like lab tests or imaging ordered to limit malpractice exposure. They also include inappropriate use of higher cost diagnostic and treatment procedures not warranted by the patient’s condition or by established treatment protocols.
- Lack of preventive healthcare can lead to the use of more expensive and avoidable services, such as ED visits and hospitalization. Timely access to affordable, quality outpatient care may lessen the need for emergency and acute care. Excessive and unhealthy lifestyle choices only exacerbate the situation.
- Fraud and system abuse, though estimates vary, waste 3% to 10% of our healthcare dollar. These practices include billing for services not provided, cost misrepresentation, and referral kickbacks.
In 2009, it was estimated that the total of all this waste prevented more than $700 billion worth of healthcare from reaching those in need. In the second installment of this series, Doug Grove explores how to remove waste and what effects the need for Lean processes will have on design.
Douglas K. Grove is a senior medical planner with CollinsWoerman. He can be reached at email@example.com .